Smartphone Is Expected Via Google

By LAURA M. HOLSON and MIGUEL HELFT

Published: August 15, 2008

T-Mobile will be the first carrier to offer a mobile phone powered by Google's Android software, according to people briefed on the company's plans. The phone will be made by HTC, one of the largest makers of mobile phones in the world, and is expected to go on sale in the United States before Christmas, perhaps as early as October.

The high-end phone is expected to match many of the capabilities of Apple's iPhone and other so-called smartphones that run software from Palm, Research in Motion, Microsoft and Nokia to access the Internet and perform computerlike functions.

The HTC phone, which many gadget sites are calling the ''dream,'' will have a touch screen, like the iPhone. But the screen also slides out to expose a full five-row keyboard. A video of the phone has been posted recently on YouTube. A person who has seen the HTC device said it matched the one in the video.

The phone's release date depends on how soon the Federal Communications Commission certifies that the Google software and the HTC phone meet network standards. Executives at all three companies are hoping to announce the phone in September because they would benefit from holiday season sales. The people briefed on the discussions declined to be named because they were not authorized to discuss the project.

Apple's iPhone has shaken the cellphone industry, partly because of its design, but mostly because AT&T and Apple have allowed owners to download any number of applications to their phones. That freedom to individualize a phone's functions has helped increase the popularity of the iPhone.

Phones using Google's software will do the same thing. Google is making the Android operating system software available free to an alliance of companies, including cellphone carriers and manufacturers who have agreed to provide devices which, like personal computers, allow users to decide which applications run on them.

Google thinks that many consumers will want to personalize their mobile phones with unique applications and services, including those made by Google.

Google is eager to get the Android platform on phones quickly because it thinks that the mobile Web is vital to the long-term growth of its digital advertising business.

''We can make more money on mobile than we do on the desktop, eventually,'' Eric E. Schmidt, Google's chief executive, said in an interview on CNBC this week.

But carriers have their own reasons for wanting devices that are more Internet friendly. For one, they can charge more for data plans than typical voice plans. And some carriers, like AT&T, are creating their own mobile applications that they hope will also be revenue generators.

''The launch of Android is an important milestone in the industry,'' said Richard Wong, a venture capitalist at Accel Partners, which invests in mobile start-ups. But, he warned, it was only one of several platforms being developed or upgraded today. He said that what he found most exciting was that Google's Android and Apple's iPhone ''forces others to innovate faster.''

Executives for T-Mobile, the nation's No. 4 wireless carrier, declined to comment on the new phone except to say it was on track to offer it in the fourth quarter. HTC, which is based in Taiwan, also declined to comment, although executives there have said they expected to deliver their phone by the end of the year.

While other carriers and manufacturers have plans to offer phones based on Google's software, the T-Mobile-HTC phone is expected to be the only Android phone available in the United States this year, according to a person briefed on the discussion.

Sprint, the third-largest carrier and also a member of the Google-led Open Handset Alliance, has been working closely with Google, too, but does not have a confirmed date for offering an Android phone, said Kevin Packingham, vice president for wireless product management. So far AT&T and Verizon Wireless, the two biggest carriers, have not committed to selling mobile phones sold with Google's software.

The chip maker Qualcomm, another member of the alliance, said the company was working on Android phones with more than five phone manufacturers.

Google executives have confirmed that phones based on Android will be available this year, but have refused to reveal details. The company said it was testing the software on several devices.

''This process ensures we have an opportunity to receive feedback from users,'' Google said in a statement.

Some makers of mobile software programs have complained that creating applications for Android has been difficult, as Google has continued to make changes to the operating system and has at times been too busy to provide support to developers. Some of those software makers have chosen to focus their development efforts, at least for now, on phones that are already on the market like the iPhone or the BlackBerry, made by Research in Motion.

But others say that creating programs for Android has been painless.

''Over a period of weeks we were able to create an application that worked very well on Android,'' said Andrew Perlman, senior vice president for content and community and general manager of Vringo, which makes video ring tones for mobile phones. Google has organized a contest for developers creating applications for Android and says it has received more than 1,700 entries.